Gas, oil and natural-gas prices are in a long tailspin, as the energy sector is trying to keep up with global demand and is trying new and exotic ways to extract it, according to industry analysts and experts.
In particular, natural-energy firms are trying to tap into the emerging markets and the cheap gas coming from shale gas, which can be sold at bargain prices to customers and producers around the world, according a report from Citigroup and RBC Capital Markets.
Natural gas prices have been stuck around $4.20 per million British thermal units for a while, and prices have dropped as much as 30% since late May, but the drop in natural-power prices has been less than 10%.
Natural-gas demand in the U.S. and Europe is already much lower than the global average, so the price of natural gas is not going to keep rising forever.
But the global market is also struggling with a glut of cheap oil.
U.K. oil production is now down to its lowest level in five years, according the IEA.
That will hurt the price even more.
The U.N. agency also said last week that prices of Brent crude, the benchmark U. S. benchmark, are going to fall again in coming months, but Brent prices remain a bit above $50 per barrel, as prices of shale oil in the United States, Russia and elsewhere are all in the range of $70 per barrel.
While it’s true that natural gas producers are also trying to extract more gas and to export more natural- gas, the market for that is now very crowded, according for example to the Citi Energy Analytics survey of the world’s largest producers.
Gas prices have fallen to as low as $3.45 per million BTU in Germany, according, Citi analysts said in a report.
It’s not yet clear whether gas prices are going up, or if they are going down, in the coming months.
In the U, natural gas production has been slowing since 2015, but it will likely continue to shrink and will probably continue to fall for a little while longer, according as the global natural-solar market is dominated by China, Japan and Germany.
In the longer term, the U (and the rest of the global) natural-growth market is facing a supply glut, and the U is going to have to cut its demand in order to keep the price up, said the Citigroup report.
But gas and natural resources, like everything else in the energy industry, are volatile.
The current supply-demand imbalance is likely to remain the same for some time, as global demand continues to increase.